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Mary decided to contribute to a superannuation fund by investing $3000 each year at the
beginning of 1990. The interest was paid at a rate of 7% p.a. for 10 years after which it was
changed to 8% p.a. starting January 1, 2000. She plans to continue to invest in this fund until
the year 2010.
(i) Show that after 10 years her investment is worth $44 350.80. 2
(ii) How much is her investment worth at the end of the 11th year? 1
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Nancy's parents invest $1200 each year in a superannuation fund for her.
Compound interest is paid at 9% per annum on the investment.
The first $1200 is to be invested on Nancy's first bi1thday. The last is to
be invested on her 21st birthday. To the nearest dollar:
Sonia and Jenny want to save a deposit of $50 000 to buy a house. They devise a savings
plan to allow them to achieve this goal. Beginning on 1st January 2014, they deposit
$ 1000 on the first day of each month into an account which pays 9% p.a compounded
monthly.
(i) Find the amount they have in the account on 31st January 2014.
1
(i.e. at the end of the first month)
(ii) Show that the amount they have in the account at the end of n months is
. b A 100?.s(i.007sn-1)
2
given Y = o.oo?s
(iii) Hence find the least number of months they need to save their deposit. 2
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Karen contributes to a superannuation fund. She contributes $250 at the start of every
quarter. The investment pays 8% pa interest, compounding quarterly. She continues making
contributions for 30 years.
(ii) What is the value of her initial $250 investment at the end of 30 years? 1